Institutional Arbitrage strategy Close Position fermentation, the US BTCSpotETF single-day outflow of 10 billion US dollars hit a record

The outflow of funds from the US BTCSpot ETF reached a record high of $1 billion in a single day, with net outflows exceeding $2 billion for six consecutive trading days. Analysts believe that institutional profit-taking, Arbitrage trading exiting, and changes in market risk sentiment are the main reasons. At the same time, BTC fell below $90,000, and other Cryptocurrencies such as Ethercoin were also affected, casting a short-term shadow over the market.

BTC ETF single-day outflow hits a new high, with 10 funds taking the lead

SoSoValue data shows that 10 out of 12 BTCSpot ETFs in the United States experienced net outflows of funds. Among them, FBTC of Fidelity suffered the largest outflow, with a daily outflow of 345 million US dollars, followed by IBIT of BlackRock, with an outflow of 164 million US dollars.

Other funds are also hard to escape, such as Valkyrie's BRRR outflow of about 100 million US dollars, Bitwise's BITB outflow of about 88.3 million US dollars, and the grayscale (Grayscale)'s BTC outflow of about 85 million US dollars, etc. Ark Invest(Ark Invest) and 21Shares jointly launched ARKB have not yet disclosed their fund flow data, so the actual outflow amount may be higher.

The outflow record broke the previous record of $671 million set on December 19 last year. At that time, the BTC price quickly retraced from its historical high of $108,000, and this fund outflow is also accompanied by a market crash. The BTC price has now fallen to the low point before the election of former U.S. President Trump last year, about $88,000.

At the same time, this is also the BTCSpot ETF's first consecutive three weeks facing net outflows of over $500 million each week, indicating waning investor confidence.

Institutions take profits, BTC market under pressure

In addition to Bitcoin, the overall encryption market is also facing selling pressure, with significant declines in major altcoins such as Ether, XRP, and SOL. Peter Chung, research director at Presto Research, pointed out that this market downturn is closely related to the decline in global financial market risk appetite:

BTC drops below $90,000, in line with a broader trend of risk aversion. This is reflected in the weakness of Nasdaq futures, the strength of the Japanese yen, and strong signals in the 10-year US Treasury yield, among other market indicators.

Chung further explained that traditional finance (TradFi) hedge funds have recently adopted Arbitrage trading strategy in large scale: 'Buying BTC ETF while shorting Chicago Mercantile Exchange (CME) BTC futures, to gain approximately a 10% spread.'

However, as the return rate of the strategy shrinks to 5%, many institutions choose to close their positions, which could become a trigger point for large-scale capital outflows.

(Arthur Hayes warns: Hedge funds profit-taking, BTC will fall to seventy thousand euros)

Institutional investors adjust their strategies, while investors are still waiting and seeing

BTC Markets analyst Rachael Lucas believes that a combination of factors has led to the outflow of funds from ETFs, with institutional investors' position adjustments being a key factor:

BTC performed strongly in early 2024, and some investors chose to take profits. After such a big rise, market volatility increased, and investors locking in profits is a natural choice.

In addition, macroeconomic factors also affect market sentiment, including the uncertainty of the China-US trade relationship, as well as market expectations for the Federal Reserve's interest rate policy, all of which make investors cautious about potential increases in capital costs.

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Analyst: Liquidity is tight, but long-term still bullish

So far, cumulative net inflows into U.S. BTSpot ETFs have fallen to $38 billion, the lowest level this year, reflecting a contraction in market liquidity and increased volatility.

However, Lucas remains optimistic, believing that the supply reduction of BTC halving event will eventually form a structural strong support for it:

Short-term ETF outflows may put pressure on the price of BTC, but basically will not cause a long-term trend reversal, because the price of BTC is influenced by spot demand, on-chain activities, derivative market trends, and macroeconomic factors at the same time.

The article Institutional Arbitrage strategy closing fermentation, the US BTCSpotETF single-day outflow of $1 billion sets a record first appeared in Chain News ABMedia.